Are advances in home theater technology killing real theaters?

You’ve got an ultra-thin, 1080p, 3D-enabled TV, a state-of-the-art surround sound system, a Blu-ray DVD player, a comfy couch, and a popcorn and soda combo that costs $2 total. You’ve also got a question: Why should I bother to go to the theater?

Your question is a good one, and it’s one that more and more home theater owners are struggling to answer. Just think about the term “home theater.” Why venture out and pay a premium when you’ve got your very own movie theater in your living room? Sure, the screen’s a bit smaller, but you don’t have to deal with yapping neighbors, shimmying down the aisle to hit the bathroom, or missing part of the movie when you do.

In this day and age, movie theaters have three things keeping them afloat: the newest movies, a huge screen, and the allure of a “night out” at the movies. The problem is, recent sales data shows that, for more and more customers, that triumvirate just isn’t enough them off of their couch. Hollywood.com statistics show that North American movie theaters counted 533 million patrons this past summer. That’s four percent fewer than last year, and the fewest since 1993. Even more troubling is that American movie theaters only sold 1.3 billion movie tickets domestically this summer. That last sentence may sound comical, but it’s all relative. Those 1.3 billion seasonal tickets are the fewest sold since 1995.

Take things from a macro to a micro scale, and the picture is just as bleak. Last month, CNN.com reported that the box-office figures for September 7 through 9 represented the worst cumulative ticket sales since September 21 through 23, 2001. If we narrow the scope even further and look at individual movies, the hits just keep on not coming. Zap2it reports that The Oogieloves in the Big Balloon Adventure, which cost over $50 million to make, turned in an anemic $448,000 and recouped less than one percent of its budget. This despite the fact the ill-fated kids flick opened up in 2,160 theaters. That gives it the dubious distinction of tallying the single worst opening weekend ever for a movie that opened in over 2,000 theaters.

So September, it seems, has produced a sort of triple-crown of box-office ineptitude. It capped the worst summer in almost two decades, yielded the worst weekend since the aftermath of 9/11, and debuted the worst-selling major release of all time. I think it’s safe to say that theaters are struggling.

One explanation might be that, for the last five years, household incomes have fallen while movie ticket prices have been on the upswing. According to the National Association of Theater Owners (NATO), average U.S. ticket prices are up 15 percent since 2007. Compare that to household incomes, which are down just under 10 percent over the same span, and you have a problematic discrepancy.

Still, despite continued economic struggles, U.S. home theater sales are on the rise. According to the Digital Entertainment Group (DEG), at-home video entertainment content netted 8.4 billion in the first half of 2012, up 1.4 percent from the same stretch in 2011. The numbers for Blu-ray disc sales were even more impressive, as they increased 13.3 percent from the previous year. Looking at these numbers, it’s clear we can’t blame the summer’s paltry box-office figures solely on the economy.

So what do we blame it on? Industry insiders offer varying explanations for why home theaters are thriving while movie theaters are slumping. Patrick Corcoran, director of media and research at the National Association of Theater Owners, told Digital Trends he attributes the discrepancy to the natural ebb and flow of public interest, saying of the theater industry’s listless September, “it was really about the popularity of what was in the box-office. We compete with other out-of-home options more than in-home options.” He went on to add that the advent of VHS tapes and DVD’s both ended up providing a boon to the industry, by increasing the public’s interest in movies. It’s an optimistic view of the situation, but as we’ve seen, the data paints a different picture.

Movie theaters have essentially been pedaling the same product for the last quarter century. Meanwhile, home theaters are advancing, literally, day-by day. The PR line is that 3D is the new wave in cinema, but a version of that technology has existed in some form or another for 60 years now. Combine that fact with the surcharge of $3 or more that most theaters tack on to your ticket for 3D and, for many moviegoers, it’s just not worth it.

There may, however, be an advance on the horizon that could inject some forward motion into the long-static movie-theater business. That technology is Dolby Atmos, a next-generation surround-sound system with a truly ubiquitous feel. Atmos has been billed as the next big thing in movies and is already being rolled out for a few select flicks. Problem is, full integration is still a ways away, and while the industry waits for Atmos to arrive in earnest, its struggles will likely continue.

If movie theaters don’t get creative and adapt to the times, they’re in danger of being left behind.